The coronavirus pandemic has been difficult for many businesses to navigate over the past year. National casino operator Caesars Entertainment has been particularly hit hard by losses from the global pandemic and they’re doing something about it.
Last Friday, March 19, Caesars filed a lawsuit with the Clark County District Court in Las Vegas for more than $2 billion. In an 8-K filing released on Monday, the company detailed that it’s suing more than 50 insurance companies for losses related to casinos closed due to the coronavirus pandemic shut down in 2020.
Caesars filed this lawsuit against the various insurance companies because of significant financial losses last year. In the filing the company says:
“Despite Caesars’ best efforts to safely navigate its gaming, hospitality, entertainment, and dining operations amid the unprecedented challenges presented by the pandemic, its businesses have suffered physical loss or damage caused by SARS-CoV-2 and/or COVID-19, including substantial losses from closures, suspensions, capacity restrictions, and/or interruptions to business activities.
In this regard, all of Caesars’ properties were shut down in March 2020 pursuant to orders of gaming control boards and other civil authorities. The closures resulted from imminent or actual property damage or loss from the ubiquitous presence of SARS-CoV-2 and the risk of infecting people with COVID-19. Since then, government orders have required, at various times, in various degrees and in various locations, shutdowns, lockdowns, facility closures, quarantines, travel restrictions, and operation restrictions, all of which substantially impacted Caesars’ properties and businesses (as well as nearby properties).”
Caesars says it didn’t stand by idly waiting for the insurance companies to cover all of its losses. Almost a year ago, Caesars hired consultants to help move forward during the pandemic. The company brought on an internationally-renowned epidemiologist and crisis management advisors to help reduce the impact of the coronavirus pandemic on its properties.
Caesars followed World Health Organization guidelines and reduced capacity at its properties upon reopening. The company also updated the following:
- Cleaning and sanitation protocols
- Improving its HVAC (Heating, ventilation and air conditioning) systems
- Introducing new health screenings for its employees
These changes certainly helped Caesars move forward but it couldn’t recover all losses. The company is still on the road to recovery as the US emerges from shutdowns and capacity limits due to coronavirus.
Caesars doesn’t necessarily want to go to court
Caesars claims the insurance companies didn’t cover their end of the policies it paid for. The national casino operator says it pays “substantial premiums” for insurance policies. The policies were supposed to provide “all-risk” coverage for Caesars and its properties. These policies should have covered Caesars for any losses or damages resulting from the interruption of its businesses.
The company says it paid $25 million in insurance premiums to the various companies. This expense was to ensure the best coverage. Over the years, Caesars has paid much more to these insurance companies for coverage. Caesars policies had more than $3.4 billion in coverage limits.
While Caesars is suing insurance companies such as Liberty Mutual, it’s hoping to come to “an amicable resolution.”